Get Computer Sciences 367 Midterm Exam 2 Tuesday, March 30th, 2004 - Pages Cs Wisc

Effect of Drawings on the Financial Statements (If an asset other than cash is withdrawn, it is reported as supplemental information on the statement of cash flows.) The income statement is not affected by the owner's drawings since the drawings are not business expenses.

Interest on Drawings will be shown in the Cr.. side of the Profit & Loss A/c, being an income for the business. It will be added to the Drawings A/c and subtracted from the Capital A/c in the Liabilities side of the Balance Sheet.

Any type of drawings reduce the capital or owner's equity of a business, so it is important to keep track of these drawings and manage them within your accounts. However, drawings are not considered a business expense.

Cash flow diagrams visually represent income and expenses over some time interval. The diagram consists of a horizontal line with markers at a series of time intervals. At appropriate times, expenses and costs are shown.

There are some basic rules for creating cash flow diagrams: Time is represented by a horizontal line marked with the number of periods in the analysis. ... The horizontal position of each arrow indicates the timing of that cash flow. Upward arrows represent positive cash flows, also known as inflows, income, or receipts.

These are the steps you can take to create a simple, but well-defined statement of work. Introduce the project. ... Define the vision. ... Set the project requirements. ... Define the scope. ... Set the deadline of the project. ... Allocate key resources. ... Create the schedule. ... Specify the terms of payment and due dates.

And if there's not much cash left, it can tell you where it went. To do this, the cash flow statement combines information from your: profit and loss – including sales revenue and business expenses. balance sheet – including owner's drawings and repayment of loan principal (your P&L only shows interest paid).

The drawing account is represented on a balance sheet as a contra-equity account, and is shown as a reduction on the equity side of the balance sheet to represent a deduction of total equity/total capital from the business.